BOSTON (HedgeWorld.com) - Hedge fund manager Stevin Hoover on August 7 pled guilty to a single count of securities fraud, admitting that he moved roughly US$200,000 in client money into personal accounts, which prosecutors said he used to buy a luxury car and to pay down his personal credit card tab.
Mr. Hoover’s sentencing is scheduled to take place in Boston on Halloween before Douglas Woodlock of the U.S. District Court of Massachusetts. The 53-year-old hedge fund manager, whose Kansas City, Mo.-based Hoover Capital Management ran the Chestnut Fund LP hedge fund, faces up to five years behind bars and a US$250,000 fine.
The ruling in the criminal case in Boston earlier this week, however, does not resolve the civil case filed by the Securities Exchange Commission in May 2001. The SEC complaint alleges that Mr. Hoover misused as much of US$3 million in investor capital. The SEC suit also accuses Mr. Hoover of distributing financial statements to prospective investors that were said to have been intended to conceal the misappropriations of fund assets.
Accounts at Hoover Capital Management and its funds have been frozen since November 2001, following a temporary restraining order filed by the SEC. Mr. Hoover’s Chestnut Management LLC was added a defendant in the case in April, after an amendment of the original SEC complaint. The status for investors in the frozen Chestnut Fund and other Hoover Capital Management accounts was not immediately clear.
Mr. Hoover could not be reached for comment. 
